Two Capitol Hill Democrats Seek Details on Fed Leak Probe

Two influential Democrats on Capitol Hill have asked the Federal Reserve for more information on its internal investigation into an alleged leak of sensitive, market-moving information on monetary policy meeting deliberations in 2012.

Sen. Elizabeth Warren (D.,Mass.) and Rep. Elijah Cummings (D., Md.), said in a letter to the Fed's General Counsel Scott Alvarez they are seeking "a briefing and additional information" regarding an internal Fed probe of "a leak of market moving information" from the Federal Open Market Committee's Sept. 2012 meeting. The leak was reported by ProPublica and Bloomberg News late last year.

They say in the letter the Fed has not released any information on the investigation.

A Fed representative said: "We have received the letter."

According to the press reports, the Fed’s investigation involved alleged leaks of sensitive information to market research firm Medley Global Advisors and The Wall Street Journal. The press reports said the leaks involved detailed accounts of the Fed’s September 2012 policy discussion, including hints about possible action at their December gathering. At that meeting, the Fed announced a new policy in which it promised to keep interest rates near zero until unemployment fell below 6.5%, as long as inflation was forecast to remain in below 2.5% over a one- to two-year horizon.

Ms. Warren, a member of the Senate Banking Committee, and Mr. Cummings, the ranking Democrat on the House Committee on Oversight and Government Reform, said they are "disturbed by this lack of transparency" on the matter.

"This leak contained key market-moving information, violated Federal Reserve policy on disclosure, and may have represented a violation of federal law," the letter said. "We believe the public has the right to know whether the Federal Reserve is taking appropriate action to address leaks of confidential and deliberative information and to prevent them from occurring in the future."